Influence of Exchange Rate Fluctuations and Credit Supply on Dividend Repatriation Policy of U.S. Multinational Corporations
Muhammad Tahir (),
Haslindar Ibrahim (),
Abdul Hadi Zulkafli () and
Muhammad Mushtaq ()
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Muhammad Tahir: School of Management, Universiti Sains Malaysia and University of Turbat, Pakistan
Haslindar Ibrahim: School of Management, Universiti Sains Malaysia, Malaysia
Abdul Hadi Zulkafli: School of Management, Universiti Sains Malaysia, Malaysia
Muhammad Mushtaq: Graduate School of Business, Universiti Sains Malaysia and University of Turbat, Pakistan
Journal of Central Banking Theory and Practice, 2020, vol. 9, issue special issue, 267-290
This study aims to examine the effect of exchange rate fluctuations and credit supply on the dividend repatriation policy of foreign subsidiaries of U.S. multinational corporations (MNCs) around the world. The difference generalised method of moments (GMM) estimator was applied to estimate the dynamic dividend repatriation model. The results suggest that the appreciation of host-country currency against the USD leads to higher dividend repatriation by the foreign subsidiaries of U.S. MNCs. Moreover, results reveal that higher availability of private credit in the host country results in lower dividend repatriation by the U.S. MNCs’ foreign subsidiaries.
Keywords: Exchange rate fluctuations; Credit supply; Dividend repatriation policy; Generalised method of moments; Multinational corporations (search for similar items in EconPapers)
JEL-codes: F23 F31 F34 G35 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:9:y:2020:i:si:p:267-290
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